Fuel Scarcity: Where Are The New Refineries?

By Erasmus Ikhide

General Muhammadu Buhari sold a dummy to Nigerians in 2015 at his electioneering when he promised to build more refineries and fix the old ones if elected the President of Nigeria in the next four years.

Three critical years of his mandatory four years in office have been wasted on revitalizing his troubled health. He has been chasing supposedly corrupt imaginary political enemies without actual prosecution, while his favoured kitchen cabinet members like Abba Kyari, the Chief of Staff and Maikanti Baru, the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC) have been massing up billion of dollars for his reelection in 2019.

President Buhari’s democratic governance style has shown that a new type of military tyranny which does not require physical strength or actual presence to secure its callous suzerainty is blooming at full mast all over Nigeria.

 Nearly two decades after the military was literally chased to the barracks, a democratically elected president has become so clueless and adamant like a rogue tyrant superintending over the gloom and despondency of the suffering mass of Nigerian people.

There is no retelling that under the President Buhari government, the youth and its hopeless vagrants are fleeing from the nation because the country has failed them. It’s heartbroken that a minority power elite and ethnic hegemonists have turned life into hell for their own people.

It’s truly debasing that Nigeria cannot put her house in order through internal reforms and political reconfiguration that accelerate social justice, democratic parity and economic empowerment of our people. 

President Buhari in 2015, promised to revive and reactivate our minimally performing refineries to optimum capacity. He made a further promise to ensure that the oil industry becomes one of the world leading/cutting edge centres for clean oil and gas technology by producing leading world oil and gas technologists, scientists, and owing mega structure installations, drilling, processing, and production facilities and engineers. He promised that these facilities and scientists will be supported with the best services and research facilities.

 Buhari promised to fully develop the sector’s capacity to absorb more of the nation’s new graduates in the labour market. He told us that the sector would be funded to produce more home-grown, but world class engineers, scientists, technologist, among others. He pledged to modernise the NNPC and make it the national energy champion. Buhari vowed to break it up into more efficient, commercially driven units and strip it of its regulatory powers, so as to enable it to tap into the international capital market.

President Buhari promised to enforce the government master plan for oil companies to end flaring that pollutes the air and damages the communities and people’s health and ensure that they sell at least half of their gas produced within Nigeria. He advocated a speeding passage of the much-delayed Petroleum Industry Bill (PIB) and ensured that local content issues are fully addressed. He vowed to make Nigeria the world’s leading exporter of LNG through the creation of strategic partnerships.

Lastly, he promised to stabilise oil price. Nigerians are left to judge whether President Buhari has fulfilled his promises above or below 0.5% for which more than 20% Nigerians elected him on his capacity to fix the distressed oil industry.

The Nigerian oil industry has been orphaned from birth without conscious efforts at meeting the basic petroleum needs of the people. Nigerian first refinery, Port Harcourt Refinery located at Alesa Eleme, was built by Shell Petroleum and British Petroleum from 1963 to 1965.

The company operates two oil refineries including an old plant commissioned in 1965 that can process 60,000 barrels of oil per stream day and the new plant commissioned in 1989, which has a capacity of 150,000 bpd.

The Warri Refinery was awarded by General Yakubu Gowon to Snamprogetti Spa Milan, an Italian company in 1975 at the cost of $478 million and commenced operation in 1978. It had the design capacity of 100,000 b/d. The Kaduna Refinery was awarded by Murtala Mohammed in 1976 and was built by Chiyoda Engineering and Construction Company a Japanese firm, at the cost of $525 million and was completed by Obasanjo in 1979. It had two refining streams (50,000 b/d fuels units) and (50,000 b/d lubes, waxes Asphalt plants).

The Port Harcourt 11 Refinery had an installed capacity of 150,000 b/d. Both Warri and Kaduna refineries at 125,000b/d and 110,000b/d with the previous makes a total capacity of 445,000b/d as at 1989. 

On August 27, 2015 President Buhari approved 65 licences for the establishment of private refineries. That is in addition to the 18 licences former President Goodluck Jonathan approved sometime in 2013. Till date, only Dangote’s and Eko Petrochem and Refining Company Limited owned by Captain Emmanuel Ihenacho have shown seriousness in building refineries in the nearest future. 

You may wish to ask, what with a country as the sixth largest crude oil deposit, yet unable to establish ordinary refineries to refine crude oil to meet the daily need of her people? How long shall we continue to export our crude oil to be refined abroad and import same back? What of the capital, job and technical flights and other associated benefits with the refining country? How does Buhari and his minders justify the fact that Premium Motor Spirit (PMS) is sold at N500 to Nigerians as the sixth largest producer of crude oil? Why did Buhari government fail to fulfill his electoral promise to Nigerians? What sin did Nigerians commit against God and their leaders that attracts such inhuman punishment to them? Why issue licences to phony companies without basic requirements to set up refineries? We must resolve the question as to why we are fated to this backward slide in all index of human regression.

If African countries are refining to meet their needs through the regular and modular refinery models, such as Senegal with $1,019 Per capita and a population of less than 16 million people runs modular refinery with a 27,000bpd capacity, Cameroon runs one with 42,600bpd; Congo, 21,000bpd; Niger Republic, 20,000bpd; Chad, 20,000bpd; Zambia, 34,000bpd, and Gabon, 25,000bpd, Algeria 499,000 bpd, Libya, South Africa and Egypt also do same with 626,500bpd and 1,102,550bpd, respectively why would Nigerian oil industry remain a basket case?

The Nigerian government should seek help since it’s bereaved of ideas on how to run its affairs for recording more failures in all its policy formulations and deliberate devilry. The Buhari government should know that these mini-refineries will not only reduce or even eliminate Nigeria’s dependency on imported products, subsidy and traffic congestion, they will also revive the local economy, the roads will last longer and safer, as much as return Nigeria to exporting refined petroleum products.

While the Buhari government insists on punishing Nigerians with untold hardship and unimaginable poverty, and the once vibrant oil unions badly and corruptly compromised, Nigerians should be consoled with their civic power to punish any stupidly naive government that celebrates while the masses suffer, every four years. It’s only then we can truly be said to have come of age.

It’s only then Nigerians can pay back wicked leaders who are victims of their own blindness and banal sectionalism. It’s only then Nigerians can proceed to see the light at the end of the tunnel. 

*Erasmus, a public affairs analyst, wrote from Lagos.